Supplier Due Diligence & Responsible Sourcing
Human-rights due diligence in Australia: 2026 readiness guide
Human-rights due diligence works best as an evidence-based management system. This guide separates current Australian modern slavery reporting law from proposed reforms and sets out practical controls for risks to people.
Start with the current Australian legal position
The Commonwealth Modern Slavery Act 2018 currently requires covered reporting entities with annual consolidated revenue of at least A$100 million to prepare annual modern slavery statements addressing the mandatory criteria. Coverage depends on the actual reporting entity, control relationships, consolidated revenue and whether the entity is based or carries on business in Australia.
The statement must describe the entity's structure, operations and supply chains; modern slavery risks; actions to assess and address those risks, including due diligence and remediation; how effectiveness is assessed; consultation with controlled entities; and other relevant information. Approval, signature and timing requirements must also be checked for the reporting entity.
Keep proposed reforms separate from current law
The statutory review recommended changes including civil penalties, a lower A$50 million threshold, incident reporting and a due-diligence system. Government materials describe these as review recommendations and consultation subjects. They must not be presented as enacted amendments unless the legislation changes.
Readiness work can anticipate likely areas of scrutiny, but the legal-status record should show which controls respond to current reporting criteria, which reflect voluntary good practice and which are contingency planning for possible reform.
Build a human-rights due-diligence operating system
A defensible system connects governance, risk assessment, supplier and purchasing decisions, worker information, corrective action, remediation and reporting. It should help decision-makers identify risks to people, prioritise the most serious potential impacts, act on evidence and show whether the action was implemented and effective.
- Set clear executive and board oversight with named operational owners.
- Map risks across operations, products, materials, services, labour models and supply chains.
- Use risk-based supplier due diligence rather than declarations alone.
- Train people who make sourcing, buying, contracting, onboarding and remediation decisions.
- Provide safe worker-voice, grievance, escalation and remediation pathways.
- Track corrective-action owners, dates, evidence, follow-up and closure decisions.
- Measure outcomes rather than only counting questionnaires or audits.
Look beyond tier one when the risk warrants it
The direct supplier may not control the site, labour provider, raw material or recruitment practice that creates the greatest risk. Use product, country, sector, workforce and sourcing information to decide when deeper mapping or evidence is needed.
Document why the review stopped at a particular tier, what information remains unavailable and how that limitation affects the decision. Avoid unsupported claims that a supply chain is risk-free, fully mapped or compliant.
Connect worker voice, corrective action and remediation
Questionnaires and audits can miss hidden or sensitive harm. A stronger system considers information from workers and credible representatives, protects against retaliation and provides practical escalation routes.
When indicators arise, record the facts, immediate protection needs, investigation ownership, leverage available, corrective action, remediation decision and follow-up evidence. Ending a supplier relationship may not remedy harm and can sometimes make affected people more vulnerable, so decisions should be risk-based and documented.
Give boards evidence they can test
Board and executive reporting should identify priority risks, serious indicators, unresolved evidence gaps, overdue corrective actions, remediation decisions and measures of effectiveness. It should distinguish verified facts from supplier assertions and explain the limits of the available evidence.
Use a controlled action register with owners, due dates, status, evidence and escalation thresholds. Review the program after material supplier, product, country, labour-model or legal changes.
Questions to ask
Focus on the decision and the evidence.
- 01
Which people, products, suppliers and labour arrangements present the most serious risk of harm?
- 02
What evidence shows that due-diligence actions are implemented and effective?
- 03
How are complaints, indicators, corrective actions and remediation escalated and closed?
- 04
Does reporting distinguish current law, confirmed facts, unresolved gaps and proposed reforms?
Primary sources
Check the controlling material.
Recommended training
Watchdog PRO Certificate: Responsible Sourcing Professional
Turn due-diligence principles into a practical system for prioritising harm, testing evidence and following corrective action through to closure.
- Map and prioritise responsible-sourcing risk
- Assess supplier evidence and audit limitations
- Apply worker-centred corrective action and remedy
Practical support
Apply the guidance to your facts.
Identify the exact product, claim, customer journey, supplier, legal entity or process involved. Preserve the information that supports the current position, record unresolved facts, assign an owner and confirm the point at which specialist review is required.
Tell us how this issue affects your organisation and receive a tailored recommendation for the most useful next step.
Important information
Check the current position.
This resource is general information, not legal advice. Laws, official guidance and proposals can change. Do not rely on a title or summary alone to decide whether a requirement applies to a particular entity, product or activity.